Rahul vs K.Sudheesh

Sophy Thomas, J.

The tenants in RCP No.53 of 2010 are the revision petitioners herein challenging the judgment of the Rent Control Appellate Authority in RCA No.43 of 2014.

The landlord filed RCP No. 53 of 2010 against the original tenant Mr.Raveendran under Section 5 of the Kerala Buildings (Lease and Rent Control) Act (hereinafter referred as ‘the Act’) for fixation for fair rent. The tenanted premises was a building with appurtenant land of two cents, where the tenant was running a saw mill. The agreed rate of rent was Rs.700/- per month and the rent agreement was dated 01.01.1998. After executing the rent agreement on 01.01.1998, there was no revision of rent, and so the landlord approached the Tribunal under Section 5 of the Act for fixation of fair rent. Considering the importance of the locality and the amenities enjoyed by the tenant, the landlord claimed Rs.7,800/- towards monthly rent. The tenant opposed that petition by filing his counter. Since the original tenant passed away, his legal heirs were impleaded as additional respondents 2 to 4 in the RCP. The landlord tenant relationship was not in dispute. The monthly rent fixed as per the agreement also was not in dispute.

PW1 was examined and Ext.A1 to A6 were marked from the side of the landlord and RW1 was examined from the side of the tenant. Exts.C1,C1(a) and C2 were marked as Court Exhibits.

On analysing the facts and evidence and on comparing the monthly rent of similarly situated buildings, learned Rent Control Court fixed fair rent of the petition schedule building @ Rs.7.50 per sq. ft. from the date of petition, to be increased by 10% every year.

The tenants took the matter in appeal, before the Rent Control Appellate Authority as RCA No.43 of 2014. The Appellate Authority affirmed the finding of the Rent Control Court fixing the fair rent @ Rs.7.5 per sq. ft. with 10% hike every year. Against that judgment, the tenants preferred this revision under Section 20 of the Act, alleging that the judgment of the court below is liable to be set aside, as it is against law.

Now let us see whether there is any illegality or impropriety in the judgment impugned, warranting interference by this Court.

Heard   learned   counsel   appearing   for   revision petitioners/tenants and learned counsel appearing for the respondent/landlord.

At the time of argument, learned counsel for the revision petitioners submitted that he is confining his challenge to the 10% increase ordered every year, to the fair rent fixed by the Rent Control Court, which was affirmed by the Appellate Authority. According to him, the revision petitioners are using the tenanted premises as a saw mill, and the building is in a dilapidated condition. So the fair rent fixed by the Rent Control Court was fair enough, and further escalation at the rate of 10% every year was excessive and unwarranted. He drew our attention to Ext.C2 commission report to show that the building was in a dilapidated condition, the door frames and hinges were damaged and the pillar supporting the roof also was in a damaged condition. The Rent Control Court, on comparing the rent of similar buildings in that locality, fixed fair rent of the schedule building @ Rs.7.5 per sq. ft., and now the revision petitioners have no quarrel with the fair rent fixed at that rate. But according to them, 10% increase every year may work out injustice to them.

When the Rent Control Revision was initially heard, a Division Bench of this Court entertained a doubt as to whether periodical increase in the fair rent can be granted while exercising jurisdiction under Section 5(1) of the Act. In order to answer that reference, a Full Bench was constituted as per orders of the Honorable the Chief Justice. The Full Bench answered the reference finding that, for good reasons, the Rent Control Court can grant periodical increase of the fair rent fixed under Section 5(1) of the Act, at a reasonable rate, say 5% to 10%, at reasonable intervals, say every year or every two years. It was further observed by the Honourable Full Court, that even in a case, in which the Rent Control Court granted periodical increase of the fair rent fixed under Section 5(1) of the Act, the right of the tenant or the landlord, as the case may be, to approach the Rent Control Court for revision of the fair rent was not foreclosed.

So, the issue is no longer res integra that the Rent Control Court can grant periodical increase of the fair rent fixed under Section 5(1) of the Act, at a reasonable rate.

Now the question posed before us is whether the 10% increase every year ordered by the Rent Control Court in the case on hand is reasonable or not.

We have already found from Ext.C2 Commission Report that the schedule building was in a dilapidated condition. The revision petitioners were using the premises as a saw mill. The building in the schedule premises was not in good shape. Considering all these facts, we feel that 5% increase every year will be reasonable and justifiable, as far as the petition schedule building is concerned.

In the result, the impugned judgment granting 10% increase every year is liable to be set aside. Upholding the fair rent fixed by the Rent Control Court @ Rs.7.50 per sq.ft. from the date of petition, we direct that the rent shall be increased by 5% every year. Needless to say, the right of the tenant or the landlord, as the case may be, to approach the Rent Control Court for revision of the fair rent, under compelling circumstances, shall not be affected due to the fixation of fair rent with annual increase of 5%.

With these directions and clarifications, the revision stands allowed in part, to the extent as above.